Seoul, South Korea and Taipei, Taiwan – When US President Joe Biden made his inaugural trip to South Korea in May as president, his first stop was a massive semiconductor manufacturing facility operated by Samsung Electronics.
The choice signaled Biden’s recognition of the importance of both Samsung, South Korea’s largest conglomerate and major US investor, and semiconductors, the chips that power countless modern devices and are at the center of the growing US-China rivalry that spans business and geopolitics.
“Semiconductors power our economies and enable our modern lives, from our cars to our smartphones to medical diagnostic equipment,” Biden said at the factory before touting chips as the next frontier in an alliance between the United States and South Korea that dates back to the 1950s. -1953 Korean War.
“By combining our skills and technological know-how, it enables the production of chips that are critical to both our countries and are essential – essential – sectors of our global economy.”
However, months after that visit, Biden’s picture of mutually beneficial cooperation is complicated by U.S. efforts to both restore its own manufacturing base and confront China.
Even as Washington tries to recruit Asian allies and partners to join the repulse against Beijing, its turn towards protectionism has caused turmoil in the US-friendly chip powers of South Korea and Taiwan, both of which have close economic ties to China.
“To a large extent, [the US] is very dependent on everyone, [and] everyone is very dependent on China,” Dan Hutcheson, vice president of TechInsights Inc., told Al Jazeera G, arguing that while these countries may see each other as rivals for chip supremacy, their economies rely on mutual trade.
There are scenarios where competition for chips could force countries to seek leverage by withholding exports of other items such as electronics or pharmaceuticals, thereby causing widespread disruption to global trade and shortages of consumer goods, Hutcheson said, adding: “Maybe it’s just get really ugly very quickly.
Biden stressed the need for measures to spur high-tech production domestically, both to create jobs and reduce dependence on foreign suppliers and the vagaries of global supply chains.
In August, Biden signed the Chips and Science Act, which highlights how the United States relies on East Asia for 75 percent of its semiconductors. The legislation provides $52.7 billion in funding for semiconductor research and is clearly intended to “counter China,” the U.S.’s main competitor for economic and military influence around the world.
The law includes “handrails” designed to prevent companies from building manufacturing facilities in China, and prohibits US companies from supplying equipment that China could use to manufacture advanced integrated circuits.
In South Korea, Japan and Taiwan, the United States’ drive to curb China’s technological advancement is challenging.
South Korean companies Samsung and SK Hynix, which together lead the global production of memory chips, and Taiwanese company TSMC, the number 1 player in non-memory chips, have manufacturing facilities in China.
Japan, another U.S. ally and home to some of the world’s top semiconductor materials and equipment manufacturers, exported more than a third of its manufacturing equipment to China last year. At a meeting with reporters last year, Kyung Kye-hyun, head of Samsung Electronics’ semiconductor division, expressed concern about “difficulties in the long term when we have to bring new equipment to our factory in China.”
Kyung also said South Korea should seek “understanding” from China, the country’s biggest trading partner, before joining the proposed “Chip 4 alliance” involving the United States, South Korea, Taiwan and Japan.
More than a year after its formation, the nascent alliance, which Biden championed as a way to foster cooperation in semiconductor manufacturing and supply, has fine-tuned a few specific details and held only one preliminary meeting.
Last month, Morris Chang, the 91-year-old founder of TSMC, lamented that globalization and free trade were “almost dead” and unlikely to return.
Tsai Yu-tai, a senior official at Taiwan’s Budget, Accounting and Statistics Directorate General, also expressed concern that Washington’s actions had created “uncertainty” for the island’s chip industry, although the impact remains unclear.
The Biden administration has recognized the need to engage major industry players to curb China’s technological advances and has granted exemptions from export controls to favored companies, including TSMC and Samsung, although it is unclear how long such exemptions may remain in effect.
TSMC, Samsung and SK Hynix have announced plans to invest in new facilities in the US in recent months, including TSMC’s two new facilities in Arizona, which are among the largest overseas projects in US history.
TSMC declined to comment. Samsung and SK Hynix did not respond to requests for comment.
For many South Korean entrepreneurs, the Chips Act added to the anguish caused by Washington’s announcement that South Korean electric vehicle makers would be excluded from tax credits granted only to vehicles made entirely in North America. Hyundai Motor and its affiliate brand Kia produce electric vehicles in South Korea for export to the US.
Businesses, politicians and media have denounced the protectionist moves as betraying the spirit of the two countries’ alliance and called on the South Korean government to introduce similarly generous measures to support the country’s industry.
“Unless politicians change their views, it will be difficult for our companies to survive the global semiconductor war without shelling,” a recent editorial in the Seoul Economic Daily newspaper said, reflecting popular sentiment in a country where industry traditionally expects the government to help it compete with foreign companies rivals by providing subsidies and tax breaks.
On Wednesday, President Yoon Suk-yeol’s administration announced that the government would increase the tax credit for high-tech investments, including semiconductors, from 8 to 15 percent.
Yang Hyang-ja, chairman of the government’s special semiconductor commission, urged the government to go further, provide more financial support and relax regulations to make it easier for semiconductor companies to expand production in South Korea.
She wrote in a Facebook post after the grant was announced that she had lobbied the government to enact a 25 percent tax credit, which she said was the minimum to prevent an “exodus” of South Korean chipmakers.
In Taiwan, some expressed concern that US subsidies could spur the relocation of semiconductor production and destroy the so-called -ruling the island as its territory.
Chris Miller, author of Chip War: The Fight for the World’s Most Critical Technology, told Al Jazeera that these fears are “exaggerated”, saying that TSMC chooses to keep state-of-the-art production in Taiwan and that “the United States cannot repeat what TSMC did in Taiwan… TSMC’s technology is top notch, and funding the Chips Act is unlikely to remove TSMC from its leading position in the chip industry.”
While TSMC is the undisputed top player in Taiwan, the country also has many smaller companies that produce less advanced chips and rely on trade with China. Some observers say the Chips Act could cut these companies off from the United States.
“[In] Taiwan, tech companies like UMC and others are really concerned because they’re not making advanced nodes… They’re a bit under the radar, but then I’ve seen them become more integrated into China’s tech ecosystem” Jason Hsu, former member of the Taiwanese parliament from the opposition Kuomintang, which has traditionally favored warmer ties with Beijing, he told Al Jazeera.
Hsu said public opinion in Taiwan is divided over the situation, with some people outraged by TSMC’s investments in the US and others believing the company has no choice but to adapt to the changing contours of the industry.
In the near term, the chip law is likely to encourage chipmakers to reduce production in China, although the importance of the Chinese market means companies will look for ways to continue selling their products there, said Lee Jang-sik, a professor of materials science and engineering at the University of Science and Technology Pohang Technology (POSTECH).
Such companies are likely to “mobilize various methods, such as bypassing the Chips and Science Act, to produce in China or sell to China,” while building more factories in the US, Japan, Europe and elsewhere, Lee told Al Jazeera.
Other analysts have also warned US policymakers against protectionist measures, arguing that the semiconductor industry relies on trade in highly specialized high-tech products and insisting on domestic production could lead to a misallocation of resources.
“U.S. self-sufficiency is an illusion,” the Peterson Institute for International Economics document reads. “The US currently exports high-value chips and imports low-value chips, so increasing self-sufficiency would require the US to prioritize basic chip production at the same time as competing with China in advanced chip production.”
The development of advanced integrated circuits also relies on collaboration between teams of experts who may or may not live in the same country.
“State-of-the-art semiconductors require over a thousand process steps, and no one person is an expert at every step,” Miller said, adding, “Therefore, chipmakers must have access to a lot of unique experience to produce advanced chips.”
Lee, a POSTECH professor, said that after the dust settles with the ongoing reorganization of the chip industry, companies and governments will be forced to respond to the need to operate more cheaply than competitors.
“In the long run, the biggest driving force for semiconductor companies is cost reduction, which is why semiconductors continue to innovate and make huge strides,” he said.
“The most important thing is the cost of production … No matter how big the tax benefit.”
The Soviet Union also secretly supported North Korea. After three years of fighting, the war ended in a stalemate, with the border between North and South Korea near where it had been at the beginning of the war.
When did China stop ruling Korea?
In August 1992, formal diplomatic relations were established between Seoul and Beijing. The ceremony also saw the signing of a peace treaty that officially ended hostilities between South Korea and China as a result of the 1953 Korean Armistice Agreement.
When did Korea break free from China? The Potsdam Declaration incorporated the provisions of the Cairo Declaration adopted in 1943, which guaranteed Korea’s freedom from colonization. The Korean peninsula was finally liberated on August 15, 1945. Read also : US-China relations at 50: learn lessons and move forward. Three years later, on the same day, an independent Korean government was established.
When did China lose Korea?
| Date | June 25, 1950 – July 27, 1953 (de facto) (3 years, 1 month and 2 days) June 25, 1950 – present (de jure) (72 years, 6 months, 1 week and 4 days) |
|---|---|
| Location | Korean Peninsula, Yellow Sea, Sea of Japan, Korea Strait, China-North Korea border |
| Result | Unconvincing |
When did China rule over Korea?
In 109 BC, China invaded and colonized Korea, establishing four commanderies ruled directly by the Chinese. The Han dynasty’s control over Korea was tenuous at best, and soon the peninsula fragmented into warring local kingdoms.
When did China lose Korea to Japan?
In 1894-95, Japan waged a war against China for control of Korea and captured Taiwan, Japan’s first colony. See the article : The United States and Canada seek consultations on Mexico’s energy policies under the USMCA. (Sino-Japanese War) Japan defeats China, long the dominant power in East Asia, in the Sino-Japanese War of 1894-1895 for influence in the Korean Peninsula.
Why did the US not declare war on China during the Korean War?
However, the United States never formally declared war on North Korea, China, or the Soviet Union. To see also : Jury finds that transportation company U.S. Postal Service cheated, verdict will result in more than $5 million conviction for U.S.. And although the US military commanded the UN Expeditionary Force, their involvement was only related to the resolution of the UN Security Council, because the UN itself cannot declare war.
Why did China get involved in the Korean War? What factors led the Chinese to decide to enter the war on behalf of North Korea? In the West, it was widely accepted that the Chinese were motivated by a combination of Chinese xenophobic attitudes, security concerns, expansionist tendencies, and communist ideology.
Which war was never officially declared?
The United States did not declare war during its involvement in Vietnam, although the Gulf of Tonkin Resolution authorized the escalation and use of military force in the Vietnam War without a formal declaration of war.
Did the United States support China or Korea?
More than 30,000 Americans died in a Cold War proxy conflict in which the United States supported South Korea and the Soviet Union and China supported North Korea.
How did China beat us in Korean War?
His troops were surprised and decimated when Chinese Communist troops began attacking his forces. On October 25, the PRC attacked the ROK soldiers and routed them in Pukchin. On November 1, the Chinese defeated American troops at Unsan in the first Sino-American battle of the war.
Who protects South Korea?
South Korea and the United States agreed to a military alliance in 1953. They called it “a relationship forged in blood.” Additionally, approximately 29,000 United States Forces Korea troops are stationed in South Korea.
Who is South Korea’s ally with? South Korea is a member of the United Nations, WTO, OECD/DAC, ASEAN Plus Three, East Asia Summit (EAS) and G-20. It is also a founding member of the Asia-Pacific Economic Cooperation (APEC) and the East Asia Summit.
Is South Korea still a US ally?
South Korea is now the world’s 10th largest economy and a world-class military that has fought alongside the United States in Vietnam and Afghanistan. “For nearly seven decades, this alliance has been the anchor of peace and security on the Korean Peninsula and throughout the Indo-Pacific,” Austin said.
Which countries defended South Korea?
North Korea was supported by China and the Soviet Union, while South Korea was supported by the United States and allied countries. The fighting ended with a ceasefire on July 27, 1953.
